Payrolls plough on
US nonfarm payrolls thrashed expectations to record a gain of +224,000 in June 2019, with modest downwards revisions of -11,000 to the preceding two months.
This made for a record 105th consecutively monthly gain, once again confirming the longest period of expansion in history, with payrolls growth still at a very healthy +1½ per cent year-on-year.
The Donald was evidently pleased.
Participation lifted a notch, and the unemployment rate ticked up to 3.7 per cent.
Has it bottomed?
Well, perhaps not, with market pricing remarkably now looking for rate cuts.
The annual growth in earnings was +3.1 per cent, for a slight miss.
Remarkable times
Despite a thumping headline jobs result, markets are still fully pricing in a rate cut in July.
And this is not just a US phenomenon.
Markets are pricing more than a 50 per cent chance of a rate cut from the Bank of England this year, despite the base rate already being at just 0.75 per cent and unemployment having been at four decade lows.
Looking at global trends, it wouldn't be a total shock if NAIRU in Australia proved to be '3 point something' (which is a long way from 5 point something).
